ECN Forum Forums General Topics of the Trade Business Related Discussion Mark up

I haven't been in business long and my thinking may be wrong but I try to cover overhead expenses as much as possible in my labor charges.

I don't want to have to rely on material sales to cover overhead. I would prefer that any markup on materials is mostly profit and not needed to cover overhead.

If a customer wants to supply their own materials I price the job as if I'm supplying the materials and then just deduct what the materials would have cost me if I had supplied them. This way I still get the material markup and the customer loses their warranty on materials. There is no benefit whatsoever for the customer to supply their own materials but if they insist this is how I handle it.
More and more I'm finding the customer has already bought the materials before they even call me.

The bottom line is I have to cover all my expenses and make a profit. It really doesn't matter how I come up with the price, whether I charge more for labor and less for materials or more for materials and less for labor I still should come up with the same price to cover all my expenses and make a profit. If I need to sell the job for $10,000 to cover my expenses and make a profit it really doesn't matter how much I'm marking up material or how much I'm charging for labor. I still need to sell the job for $10,000. If I charge more for the materials I can charge less for the labor but if I charge less for the materials I'll need to make up the difference in the labor charges.

When I install a switch for $135 and the customer wants to know how much I'm charging for the switch I can tell him the switch is free and the labor is $135 or if he'd prefer I'll give him free labor but the switch is $135. Either way I need the $135 to cover my expenses and make a profit.

The only thing the customer should be concerned with is the total price. How I arrive at the total price shouldn't be any of his concern. If he doesn't like the total price he has the option of doing it himself or finding someone else.

I try to avoid breaking out labor and materials but I do have some commercial and goverment customers that insist on having the labor and materials listed seperately on the invoice. I guess they're worried I'll charge them a $100 for a wirenut.